Smith (ds) Share Discussion Threads

[huckers] 23/6/2023 15:07

Does anyone know and can be bothered to tell me what their geographical footprint is? Thanks in advance.

[blueclyde] 23/6/2023 15:04

It would not make the Buffett grade as earnings are not being turned into cash. Despite the illusion of strong earnings debt is growing. That's why the price is being hammered.

[dope007] 23/6/2023 11:08

This crep is happening across loads of stocks. Profit beats, upped forecasts and then dumped for days. UK mkt as a whole is being relentlessly sold off

[lovewinshatelosses] 23/6/2023 11:01

Goodness me! I have bought some falling knives in my time, but rarely after such an impressive market update!
Looks like history will be repeating itself and I will be adding again around the 250p mark as well. Ex div in September is it? So maybe will get the chance to add around that level in August, when the markets are typically quiet.
I remember being prepared to buy a third tranche if 2 quid hit, last October/November, when further falls looked likely (to my mind at that time). Perhaps I will have that chance this autumn?
While nothing is 100% safe, IMO this is one of those outfits that would make the Warren Buffet grade.
So, subject to the obvious caveats, if needed, I can and will tuck these away for the longer term. GLA.

[riverman77] 23/6/2023 10:23

DS Smith has amongst the lowest margins of the big packaging companies, so would likely take more of a hit if we see a big slowdown. Leverage is also higher than its peers. Probably priced in now though.

[essentialinvestor] 23/6/2023 10:15

Gearing is modest so not an issue unless their revenues falls off a cliff.

[anhar] 23/6/2023 10:09

My view is that most short term prices move randomly and have no reason. But if you must seek one behind the large fall in SDMS since the results, it's prob the drop in sales volume coupled with the recession we may be facing, which if it happens could precipitate further volume falls.

Although in the year to 30 April 23 they more than compensated for the volume fall by increasing prices - leading to an increase in sales value - in a recession falling demand will likely limit how much they can increase prices. So eps may well be hit if that happens and consequently the shares become less attractive, making sellers more prevalent than buyers at the moment.

I don't think the debt increase has much to do with it because gearing remains fairly reasonable.

I've held the share for some years in my income port but it's not one of my better performers. Divis have been cut in the past so they have form on not being amongst my most reliable payers, though the 18p for 23 is something of a record payout from memory. And it's showing quite a loss on capital, though I'm purely an income investor and ignore price flucs.

[pinemartin9] 23/6/2023 09:36

My target entry point is 250 if it get's there.

[rcturner2] 23/6/2023 09:08

In tough times people tend to cut out big ticket items first like cars and holidays. I can't see the demand for packaging cardboard changing much.

[spawny100] 23/6/2023 08:54

I can only see the market share for online shopping increasing, particularly so if money is tight, given that more often than not Amazon/eBay are the cheapest places to buy stuff.

[essentialinvestor] 23/6/2023 08:52

With respect this may be an oversimplification. What the market may 'think'
(at least for now) is there are downside risks to earnings over the next couple
of years - does not mean this is definitely right, but weakening macro
is weighing and packaging has heavy operational gearing - estimates
can change very rapidly, in either direction.

[sun1950] 23/6/2023 08:45

It’s simple the market thinks that the earnings will be 30p this year trading on 9 times = 270p

[tigerbythetail] 23/6/2023 08:25

I'm really not sure why this should be trading near 5 year lows, given yesterday's strong results.
Seems more like an opportunity than a risk to me...

[blueclyde] 22/6/2023 17:46

You do not need to argue with me. Price will tell you everything. Argue your point with it.

[dogwalker] 22/6/2023 17:25

What about it!

[ianood] 22/6/2023 16:57

Read the notes re dividend timing!

[blueclyde] 22/6/2023 16:54

Problem is the debt. It is going up.

[spawny100] 22/6/2023 14:14

Been watching these hovering around £3 for ages waiting to buy a few. Today seems like too good an opportunity to waste so bought some. Market in despondent mood and this seems unfairly punished given the decent results.

[tigerbythetail] 22/6/2023 13:24

Very puzzling price action today. Those are indeed good results. And debt is only 1.3x and coming down, so it's not ridiculously high.

[pinemartin9] 22/6/2023 12:55

Is it the debt that's dragging this down? Need to research but with BOE rates going up could that have a bearing? Very interested here at these prices. My gut feel is that it could drop further. I'm not in a rush as doesn't go ex-dividend for a while so will watch for a bit. That said, I'm sure those in at these prices will do well long term.

[jeffian] 22/6/2023 10:00

In the 1990'3 I built an entire portfolio based largely on Low PER/High Yield shares and it did me very nicely in the post-dotcom era. On a PER of around 8 and a near 6% yield, this one absolutely fits the bill. Happy to hold.

[mcunliffe1] 22/6/2023 09:42

Yesterday's drop was down to a report from FedEx stating their sales are down. Hence, all packaging companies shares dropped by about 5-6%

Naturally, FedEx deliver ALL the internet ordered parcels so this must be a disaster. Try telling my daughter and wife to stop buying on the internet - it you're brave :-)

[nicyts2] 22/6/2023 08:52

Patience always required when investing. Trust your judgement. These are good results. Dividends good and increasing. Good businesses will do well just have to navigate life like the rest of us.

[nonwoke] 22/6/2023 08:46

Good results and yet no recovery from yesterdays debacle in the SP, i am perplexed, wish someone could explain and yes whilst debt could do with coming down these are a good set of results

[lovewinshatelosses] 22/6/2023 08:23

Well, having jumped out too early last time, I have bought back in again today (probably too early again).
Eerily similar price to my initial buy, which was followed by an average down circa 254p, if memory serves me correct.
Will do the same if the pattern repeats.
I thought the update was very good. Even allowing for all the macro stuff, IMO 320p should be a very conservative TP. I hope so anyway, but can tuck these away if needs be. GLA.